On Feb. 6, the Senate Committee on Labor and Regulatory Reform held a public hearing on two bills that would change agency rule-making process in Wisconsin. AB 384, authored by Assembly Majority Leader Jim Steineke (R-Kaukauna) and Sen. Alberta Darling (R-River Hills), would put expiration dates on administrative rules. SB 745, authored by Sen. David Craig (R-Big Bend) and Rep. Andre Jacque (R-De Pere), prohibits an agency from seeking deference in any proceeding based on the agency’s interpretation of the law, includes additional requirements for how agencies can adopt and use guidance documents, and provides that settlement agreements do not confer rule-making authority.

The committee first heard testimony on AB 384. Author Rep. Steineke discussed the changes made to the original bill by the Substitute Amendment passed by the Assembly. Under the sub, chapters of administrative code expire after nine years (as opposed to seven years in the original bill). The sub also requires the Joint Committee for Review of Administrative Rules to create a schedule detailing the expiration of currently existing code chapters that are not repealed and recreated prior to Jan. 1, 2030 (extending the deadline from 2027 in the original bill). Under the sub, agencies must give notice of proposed re-adoption or expiration of two years (instead of one year) prior to the rule’s expiration. The notice must also contain all related guidance documents. Steineke said the changes to the bill give the legislature more oversight in the re-adoption process.

Testifying against the bill were the Sierra Club and the Child Support Enforcement Association. Both expressed concerns about the possibility of important rules expiring because agencies would not have enough time to re-promulgate them. The Child Support Enforcement Association suggested some rules be exempt from the expiration and re-adoption process.

Lucas Vebber of Wisconsin Manufacturers and Commerce (WMC) and Brian Dake of Wisconsin Independent Business both testified in support of the bill. Vebber said releasing guidance documents that are currently difficult to access would provide more clarity to regulated businesses in Wisconsin. Vebber objected to opponents’ concerns about agencies not having enough time to re-promulgate rules, saying that most chapters will be readopted on a regular basis. Dake echoed the WMC testimony and said fixing outdated rules is important as businesses adapt to new technology and business practices.

On SB 745, the bill’s authors said eliminating sue and settle regulation, establishing parameters on guidance documents, and prohibiting agency deference in the court system ensures that the legislature, not agencies, make state laws.

WMC again testified in support of the bill and the regulatory fairness and clarity it would bring to businesses. Bob Fassbender of Great Lakes Legal Foundation also spoke in support, citing a brief the foundation filed in Tetra Tech v. Wisconsin Department of Revenue that argues agency deference by courts is unfair and unconstitutional. No groups testified against the bill, but several utilities are registered against it.

The Senate committee voted 3-2 on Feb. 14 to pass SB 745, with one amendment making changes to the agency process of adopting guidance documents.